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China Eastern cancels order for Boeing 787s

(China Daily)

08:36, October 19, 2011

BEIJING - Chinese airlines that used to boast about ambitious international expansion plans are now turning their focus back home as the weakening global economy hurts demand for long-haul air travel.

China Eastern Airlines Corp, the country's second-largest carrier by aircraft numbers, announced on Monday night it was canceling its order for 24 Boeing 787 Dreamliners in favor of 45 smaller 737s, which will be delivered between 2014 and 2016.

The airline cited the delay in the delivery of the Dreamliner and a weakening world economy, which is hurting long-haul international air travel, as the reason for the cancellation.

"We are not optimistic about the international market in the next two years, for the weakening global economy hurts air travel," said Luo Zhuping, secretary of the board of China Eastern. "We are making rapid moves to serve domestic demand, which is still robust at the moment," Luo said.

The Shanghai-based carrier is the first Chinese airline to cancel orders for the 787.

The list prices for the 787 and 737 orders are comparable, but the carrier will pay significantly less than the $3.3 billion list price for the 737 order, China Eastern said in a statement.

It will also deduct compensation Boeing Co offered for the delivery delay from the price.

China Eastern will also return five A340-300s to Airbus SAS in exchange for 15 smaller wide-body A330s, which could be operated on domestic routes, Bloomberg reported. The total value of the A330s is $2.53 billion, the carrier said.

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wende at 2011-10-1971.255.93.*
One must remember that 787 cannot land just anywhere because of its size and weight. Where can a 787 land when there is an emergency? Chinese companies must hold their ambition to unbridled expansion. Profitability is the key to consider.
Asian Observer at 2011-10-19220.255.2.*
China should quickly build up its own indigenous civil aviation industries and placed less reliance on the west in order to limit outflow of her precious foreign exchange. Not to forget, Boeing is one of the largest arms suppliers to Taiwan. If China applies US defined guidelines, Boeing will be on the sanction list of companies long ago.
  

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